USD Faces Pressure, GBP Mixed, EU Sees Recovery Signs.

USD Under Pressure Ahead of Key Data Releases

The US Dollar (USD) faces modest selling pressure on Thursday as investors await crucial data releases. The US Bureau of Economic Analysis is set to unveil the first estimate of annualized Gross Domestic Product (GDP) growth for Q1, while the Department of Labor will release weekly Initial Jobless Claims data. Despite Wednesday’s minor losses, supported by upbeat Durable Goods Orders data for March, the USD Index remains in negative territory, hovering around 105.50. Market forecasts predict a 2.5% Q1 growth rate, following a 3.4% expansion in Q4 2023. Concurrently, US stock index futures decline, and the 10-year US yield fluctuates above 4.6%.

USD Gains Ground on Durable Goods Orders Surge

The USD gains traction as durable goods orders exceed expectations in March, rising by 2.6%. This surge, attributed to non-defense aircraft sales following the Boeing safety scandal, bolsters investor confidence amid signs of increasing momentum and spending in the US economy. However, the USD’s upside potential is capped by a cautiously upbeat market sentiment favoring riskier rivals.

GBP Mixed Amid CBI Data

The Pound (GBP) experiences mixed movements as the Confederation of British Industry (CBI) reports improving sentiment but declining orders in April. Despite a drop in industrial trends orders, manufacturers anticipate output growth over the next three months, reflecting a more stable outlook for investment.

EU Economy Shows Signs of Recovery

Recent data suggests a turnaround in the EU economy, potentially limiting ECB cuts and stabilizing the euro. Improvements in economic indicators, particularly in the US, EU, and UK, indicate a fading risk of recession. Positive PMI and business climate survey data in Germany contribute to the euro’s strengthening against the pound and the USD.